We have implemented digest authentication with database to secure any web service call. This works fine in the IIS 5.1 in my machine. Now we upgraded the solution to Visual Studio 2008 and IIS7.
Below is the link I followed to implement digest authentication.
http://www.eggheadcafe.com/articles/20030701.asp
It works fine in my machine. If I move my working folder to IIS7 to test and see if it is working it does not work. It comes up with an error that states 401 Unauthorized.
If you need to recreate the issue, you can download the code from the above link and try to make it work on IIS7. Any help regarding this is greatly appreciated.